Buy your refunded or military service credit by Aug. 31 to avoid a cost increase
You’ll pay more for refunded and military service credit starting Sept. 1.
Plan ahead and allow yourself plenty of time to complete the process.
Please note:
- This does not apply to ERS members who are in Retirement Group 4 (started at a state agency on or after Sept. 1, 2022).
- The Aug. 31 deadline does not apply to Additional Service Credit (ASC) and most waiting period service credit. The cost for ASC and waiting period service increases every year on your birthday. It is important to review your waiting period coupon, as a portion of some waiting periods will expire on Aug. 31.
Annual increases for refunded or military service credit
The cost of buying refunded service credit includes the amount you withdrew plus 10% interest for each fiscal year from the date of your withdrawal. Military service credit also includes 10% interest per fiscal year from when you were first eligible to purchase the service. If you miss the Aug. 31 deadline, the price of your refunded or military service credit will increase 10% in the new fiscal year.
How to purchase your service
If you don’t know the current cost of any service credit available for your purchase, learn how you can request an estimate. When you request an estimate, ERS will email you a service purchase coupon within 7 to 10 business days.
Once you have your service purchase coupon, you can purchase your service by sending ERS a check or money order, or with a rollover from a qualified retirement plan. The timeline to complete the purchase depends on how you submit payment, or if you are buying the service credit to retire by Aug. 31.
If you’re mailing a check or money order
Your payment must be postmarked by Aug. 31, 2023 for you to get the FY23 price. If your payment is not postmarked by the Aug. 31, 2023 deadline, the price of your refunded service credit will increase 10% in FY24.
If you’re paying with a rollover from a Texa$averSM 401(k) or 457
Texa$aver rollovers can take up to a month to complete; no paperwork is required. However, if you do not have sufficient funds in your Texa$aver account to cover the entire cost of the purchase, it will take longer because you will have to send in additional funds. You cannot send the remaining amount until ERS notifies you of how much you owe. This is to ensure you send the correct amount. Sending the wrong amount will cause delays, so you must wait until you hear from us. Allow enough time for the rollover to go through (up to 30 days) and, after that, to send any additional funds by the Aug. 31 deadline.
If you’re paying with a rollover from an account other than Texa$aver
- Rollovers from a qualified retirement account at an outside financial institution can take 30 to 90 days, and the process includes forms that you and the financial institution must fill out before ERS can accept any payment. Start the rollover process now to ensure you can complete the paperwork and buy service credit by Aug. 31.
- The first step is to call ERS to request the rollover before working with your financial institution. If we receive a payment from your financial institution before we have received and approved the appropriate paperwork, it will cause delays.
- If you do not have sufficient funds in your account to cover the entire cost of the purchase, it will take longer because you will have to send in additional funds. You cannot send the remaining amount until ERS notifies you of how much you owe. This is to ensure you send the correct amount. Sending the wrong amount will cause delays, so you must wait until you hear from us. Allow enough time for the rollover to go through (up to 90 days) and, after that, to send any additional funds by the Aug. 31 deadline.
If you are planning to retire on or before Aug. 31
- Service purchases must be applied to your ERS account before your retirement date. This can take two to three days after ERS has received your payment for your service purchase. If you need to purchase service credit to be eligible for retirement, you must wait to apply for retirement until after you get a notification from ERS verifying that we have applied the service to your account.
- We must get your signed retirement documents by your intended retirement date. We cannot send these documents until you have applied for retirement. If you plan on purchasing service and retiring, give yourself plenty of time to complete the service purchase, apply for retirement and return your documents by the intended retirement date.
See more information on purchasing service credit, purchasing service with a rollover and the three steps to retirement.